'SA must brace itself for more poverty, inequality’
Economists and financial experts have warned South Africans to prepare for more poverty and inequality as a result of the Covid-19 pandemic.
Speaking at a webinar on Wednesday, senior economist at Absa Peter Worthington warned that the government’s R500 billion business and social relief package is not enough to stimulate the economy.
"It is very good that we have it, but I don't think it will be enough to lift us out of the sickbed and get the economy dancing in robust health,” he said.
“It will keep us on life support while we try to slug our way through the pandemic."
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Worthington said they estimate that the economy will contract by around 10% this year.
"What is remarkable is that when I estimated in March my figure was around 3%. What we didn't know then was that the lockdown will be extended, with material restrictions post the end of April, and even when those restrictions are lifted those negative economic consequences and feedback will continue causing damage going forward."
Head of South African investments at Ninety One Nazmeera Moola said a 10% contraction will result in an estimated 1.5 million job losses in the formal sector.